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Retention is the new conversion

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Intercom co-founder and Chief Strategy Officer Des Traynor discusses why retention is more important than conversion in modern subscription businesses.

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Retention is the new conversion

  1. 1. Retention is the new conversion @destraynor from @intercom
  2. 2. And it’s not just SaaS businesses realising this
  3. 3. BEAUTY
  4. 4. EVEN LIPSTICK
  5. 5. CLOTHES
  6. 6. EVEN UNDERWEAR!
  7. 7. BEARDS!
  8. 8. MEAT?
  9. 9. JUST THINGS FROM JAPAN!!!
  10. 10. I’M NOT EVEN CLOSE TO BEING DONE
  11. 11. If you can think of any product, no matter how weird, someone somewhere is offering a service to get it per month…
  12. 12. Two magic words:per month
  13. 13. Brand promiscuity → Brand loyalty Buy before you try → Try before you buy Complex sales process → Low/no-touch sales process Marketing built around conversion → Marketing built around success Chaotic revenue → Predictable revenue How we’ve changed…
  14. 14. This subscription world is here to stay 
 It’s a very lucrative world 
 It’s a different business model 
 The role of marketing changes 
 The new role is about making your customer successful So what?
  15. 15. Retention is more important than conversion
  16. 16. We’ve learned a lot about conversion over the years
  17. 17. Ads SEO SEM SocialWOM
  18. 18. A. B.
  19. 19. Sign up now If you’re interested in getting started click here
  20. 20. Sign up now Sign up now
  21. 21. Sign up now Sign up now
  22. 22. Sign up now Sign up now
  23. 23. ✓Top of funnel ✓Website design ✓SEO ✓A/B testing ✓Buying ads ✓….
  24. 24. Retention is the next funnel
  25. 25. 1,000,000 active customers after 16 months 1,000,000 customers after 4 days or
  26. 26. How do we measure it?
  27. 27. Net dollar retention is the defining metric of a subscription business. If you are considering a subscription model, churn and expansion will define your success.
  28. 28. The role of retention €0.00 €10,000.00 €20,000.00 €30,000.00 €40,000.00 €50,000.00 €60,000.00 €70,000.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 1% expansion 1% churn
  29. 29. No growth or contraction 0 500 1,000 1,500 Jan 2019 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
  30. 30. Does your business grow by default, or shrink by default? 0 500 1,000 1,500 Jan 2019 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan by adding new customers by expanding from existing customers
  31. 31. Grows by $100 and contracts by 1% 0 500 1,000 1,500 Jan 2019 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
  32. 32. What does “good” look like Twilio Atlassian Slack Pager duty New Relic Net Dollar Retention 0% 50% 100% 150% target range 120%-140% 155 148 143 140 115 Try logos
  33. 33. LTV > CACLifeTime Value of a customer Customer Acquisition Cost
  34. 34. So where does it usually go wrong?
  35. 35. 💩 Content / SEO Advertising Virality Word of mouth Media/PR Homepage
  36. 36. 💩 Content / SEO Advertising Virality Word of mouth Media/PR Homepage Signs up
  37. 37. 💩 Content / SEO Advertising Virality Word of mouth Media/PR Homepage Signs up Onboarding
  38. 38. Content / SEO Advertising Virality Word of mouth Media/PR Homepage Signs up Onboarding Happy customer
  39. 39. Content / SEO Advertising Virality Word of mouth Media/PR Homepage Signs up Onboarding Happy customer
  40. 40. Content / SEO Advertising Virality Word of mouth Media/PR Homepage Signs up Onboarding Happy customer Former customer Happy customer of another product 💩
  41. 41. 💩 You have to work very hard to stop it all going to
  42. 42. Content / SEO Advertising Virality Word of mouth Media/PR Homepage Signs up Onboarding Happy customer Former customer Happy customer of another product 💩
  43. 43. Customer retention is built on great onboarding.
  44. 44. Text here
  45. 45. WHAT IS CUSTOMER onboarding? Trying it out Buying and paying for it Getting set up for success Buying more over time Learning about changes
  46. 46. What makes for great onboarding?
  47. 47. ? 🙂😑 Signup form Product
  48. 48. Marketing team Product team Onboarding
 (team?)
  49. 49. 1. Interview customers who have recently signed up for your product 2. Decide which customers you can onboard and what their 4 forces are 3. Design an experience for customers that walks them through to their goal 4. Have metrics for what success looks like for their use case 5. Ensure that product and marketing work in parallel How to improve it…
  50. 50. 1. Interview 4 types of recent signups
  51. 51. Signed up, and then vanished What were they looking for? Are they an actual prospect? Signed up, started a trial and converted recently How did they know? What did they need to see? Signed up, started a trial and cancelled recently What went wrong, what was missing, would anything have changed their mind? Currently on a trial with your product What open questions do they have? What else are they doing? What were they doing before they came to your product?
  52. 52. 2. Decide who you can onboard
  53. 53. N eed Desire Capability
  54. 54. N eed Desire Capability ✓ Need it ✓ Want it ✕ Can do it
  55. 55. N eed Desire Capability ✕ Need it ✓ Want it ✓ Can do it
  56. 56. N eed Desire Capability ✓ Need it ✕ Want it ✓ Can do it
  57. 57. 3. Use the four forces
  58. 58. existing solution new solution Reasons to switch Reasons to stay Problems with Current Product Attraction of New Product Existing Habits & Allegiances Anxiety & Uncertainty of Change PUSH PULL ANXIETYHABIT The 4 forces influencing a customer switch from or to a competitor
  59. 59. 4. Design specific onboarding for each type of customer
  60. 60. 1. If your product has different users, you need different ways for them to get started Day 1 “Let’s show you Project Reporting!!!” I’m an agency owner looking to measure consultant productivity Our client engagements need better paper trails for decisions made We’ve been on MS Project for years and think it’s time for an upgrade. I adopt this in every company I work in Just let me get started
  61. 61. 2. Have targeted help, support, docs, tutorials, case studies to help them succeed Consultant reports How your team tracks work Improving your % An example audit log Case study #1 Practical Tips What’s new in our product” “The new way to manage” Pitching your team Importing from MS Your first week How to search I’m an agency owner looking to measure consultant productivity Our client engagements need better paper trails for decisions made We’ve been on MS Project for years and think it’s time for an upgrade. I adopt this in every company I work in Just let me get started
  62. 62. 5. Measure the changes you want to see
  63. 63. What do your best customers do? Add 10 friendsSubscribe to 3 
 podcasts Configure 
 5 alerts Upload 
 5 files Invite their 
 teammates
  64. 64. Ensure that marketing and product work in parallel. When one changes, the other adapts
  65. 65. Your onboarding must improve as your product improves
  66. 66. Optimizing vs Redesigning
  67. 67. Don't get sucked into black hole of tiny optimizations. Know when to reset.
  68. 68. Performance Change in product Little Good Lots Bad Optimize ? ??
  69. 69. Performance Change in product Little Good Lots Bad Optimize ? Redesign?
  70. 70. Performance Change in product Little Good Lots Bad Optimize Redesign Redesign?
  71. 71. Performance Change in product Little Good Lots Bad Optimize Redesign RedesignRedesign
  72. 72. There’s only one good case for optimization: When you think you’re doing the right thing, but just need to make it better
  73. 73. An Intercom Example
  74. 74. <script> window.intercomSettings = { app_id: “####”, name: "Nikola Tesla", // Full name email: "nikola@example.com", // Email address created_at: 1312182000 // Signup date }; </script>
  75. 75. HOW TO HELP AS MANY CUSTOMERS AS POSSIBLE TO Install the JavaScript correctly our 2011 definition of onboarding
  76. 76. 2011
  77. 77. 2014
  78. 78. Thankfully we talk to our customers :)
  79. 79. v v
  80. 80. The product had changed so the onboarding needed to change
  81. 81. HOW TO HELP AS MANY CUSTOMERS AS POSSIBLE TO Install the JavaScript correctly
  82. 82. HOW TO HELP AS MANY CUSTOMERS AS POSSIBLE TO Get their users into Intercom
  83. 83. Email address to new app conversion rate 0% 10% 20% 30% 40% 50% May June July August September October November ~30% CSV signup launch ~45%
  84. 84. New apps by signup type May June July August September October November JS installs CSV imports
  85. 85. N eed Desire Capability ✓ Need it ✓ Want it ✕ Can do it
  86. 86. N eed Desire Capability ✓ Need it ✓ Want it ✓ Can do it
  87. 87. This comes from having a relentless focus on high impact work
  88. 88. Eat, don’t snack
  89. 89. Reach x Impact x Confidence Effort RICE score =
  90. 90. When a good org is mature, there’s not a lot of work here. This is the core of our strategy. It’s hard work. It’s meaningful work. It works. We need to stay way out of here.
  91. 91. If you want to have a high impact team, stay away from low impact work
  92. 92. So…
  93. 93. Net dollar retention will be your defining metric. 
 It comes from successful users using your product a lot. 
 Successful users come from great onboarding. 
 Great onboarding must be a key product area for you. 
 Focus on impact, don’t snack.
  94. 94. Thanks! @destraynor from @intercom
  • BenCallis2

    Sep. 10, 2020
  • tjh

    Feb. 2, 2020
  • aladinov2

    Dec. 2, 2019
  • marcguirand

    Nov. 28, 2019
  • Herm4n86

    Nov. 23, 2019
  • JohnLeenane

    Nov. 13, 2019

Intercom co-founder and Chief Strategy Officer Des Traynor discusses why retention is more important than conversion in modern subscription businesses.

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